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Sunday, December 13, 2009

Loss of jobs and lost way of life

“Anybody who reads history has to approach these things with some humility because you can’t know. Nobody knows what the last chapter ever looks like.” - United States Secretary of Defence Robert Gates

It's good advice, with lots of applications. As I write this I'm going to try and keep Gates' words in mind.

The layoff at the local paper hurts and it hurts more than just the affected workers; It hurts the community.

Layoffs are not about the disappearance of jobs but the moving. They may go to China, India, Mexico or, in the case of Sun Media and Quebecor, Barrie, Ottawa or Woodstock. Whether the jobs are moved half a world away or just half a province, the community still suffers.

Both Barrie and Woodstock are the locations of Sun Media Centres of Excellence. Ottawa is home to a Sun Media call centre. I'm not sure if it's another centre but from my contact with the Ottawa service, it isn't a centre of excellence in my book.

If I worked in any of those place, I would not be confident that I would have my job in ten years. Sun Media and Quebecor have shown a willingness to disrupt the lives of the workers in order to save money. The Third World beckons and I would not be surprised to see these companies respond to the sirens' call - a call heard around the country, "Cheap workers. Think China, India, Mexico . . . Barrie."

I call it, "Welcome to the Third World." You may have a good education: a degree in English. You may have a mortgage, a car, a child or two in college. You may have a job at a company bragging about increased profits. And you may be asked to take a paycut if you want to keep you job. If you refuse, thanks to the Internet, many jobs can be located just about anywhere.

Are we in a race to the bottom? Is this the beginning of, "Welcome to the Third World."

Allow me to quote Elizabeth Warren, Chair of the Congressional Oversight Panel, from her recent article in The Huffington Post:

"Families have survived the ups and downs of economic booms and busts for a long time, but the fall-behind during the busts has gotten worse while the surge-ahead during the booms has stalled out. In the boom of the 1960s, for example, median family income jumped by 33% (adjusted for inflation). But the boom of the 2000s resulted in an almost-imperceptible 1.6% increase for the typical family. While Wall Street executives and others who owned lots of stock celebrated how good the recovery was for them, middle class families were left empty-handed.

The crisis facing the middle class started more than a generation ago. Even as productivity rose, the wages of the average fully-employed male have been flat since the 1970s.


2009-12-03-warren12.jpg 
But core expenses kept going up. By the early 2000s, families were spending twice as much (adjusted for inflation) on mortgages than they did a generation ago -- for a house that was, on average, only ten percent bigger and 25 years older. They also had to pay twice as much to hang on to their health insurance."
Yes, I know that Warren is talking about the States but a lot of what she says applies to varying degrees to Canada.

When Warren writes: "America today has plenty of rich and super-rich. But it has far more families who did all the right things, but who still have no real security. Going to college and finding a good job no longer guarantee economic safety." I believe you can replace America with Canada and the sentence still makes  sense.

As my mother used to say, "Something is rotten in Denmark." And the rot runs deep.

When the experts running the CPP can lose 17 percent of our retirement money and then pay themselves bonuses of a million plus for their good work, something is wildly out of alignment in our economic engine.

One does not have to look far to find examples of grossly overpaid executive royalty. The United States has the finest kingdoms but the fiefdoms in Canada are quite amazing.

Quebecor was once the biggest printer on the world stage. But partially under the guidance of Pierre Karl Peladeau the printing giant became a stuggling, severely financially-crippled concern. Maybe PKP should outsource his own job. I have some of my retirement money in China, some in Singapore, and all those stocks did much better than Quebecor's former printing division. 

[Since last writing about Quebecor World, Chicago-based printer RR Donnelley tendered an unsolicited bid to purchase Quebecor World, the insolvent (Sun Media's term) printer. This bid was rebuffed, but in June of this year (2009) Mark Angelson, a former RR Donnelley CEO was named chairman of the printer reorganized to "satisfy" bankruptcy code requirements. Quebecor World and Quebecor, the owner of Sun Media, are now totally separate companies with a shared past but unlinked future. I thank an alert reader for this clarification.]

I am not going to try and tell the future; As Robert Gates pointed out, this is a fool's game. But I do have doubts about PKP's abilities and the manner in which he runs his companies. It is only a personal opinion, but I don't think PKP's approach is good for London or for Canada. I don't think it is even good for Barrie, Ottawa and Woodstock.

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